When applying for a loan or a mortgage, you have numerous forms and processes to complete before getting your money. One of the final parts of the loan process is the verbal verification of employment or VOE.
This is a process that typically takes little time and effort on your part, but it’s still worth understanding. There are certain situations that require your participation, and the process can vary for those who are self-employed.
First, let’s examine what the process is before diving into how the process works.
If you’ve applied for a loan or a mortgage, the lender needs to ensure that you’re likely to repay the money. A lender uses a VOE to verify that you’re still employed and making what you claim to make during the time of the loan application.
The VOE process ultimately serves to reduce the risk for lenders, which is why it’s generally performed near the end of the loan process. By having the VOE near the closure and delivery of the loan, the lender can be sure you’re making enough to pay for the loan and won’t default.
In some cases, the VOE will even be done after a loan is closed on, but before it is delivered. Again, this is to protect the lender and increase the chances that the loan will be paid in full.
The VOE process is straightforward and involves a basic form and a confirmatory call to the applicant’s employer. A loan typically takes roughly 40 days to close, with the VOE process taking place near the end of that process. The process should take no more than a few days to a week, as long as there are no complicating factors.
The VOE process can vary slightly depending on the lender. For Fannie Mae, one of the most prominent lenders in the mortgage space, the process is as follows:
If you’re self-employed, you’ll be much more involved in the verbal verification of employment process. Again, the process can vary depending on the lender, but it typically goes as follows:
The process can vary, and the time it takes isn’t set in stone either. The VOE is generally a small part of the overall loan process and doesn’t take much time, but there are hangups that can cause things to take longer than anticipated.
Ideally, the verbal verification of employment process is quick and straightforward. But, there are some issues that can cause delays in the process or disqualify you from receiving the loan entirely.
There are a number of complicating factors and situations that can interfere with the VOE process. In any event, stay calm and be prepared to explain to the lender why that situation occurred. Sometimes an explanation can simply require a call or a meeting with the lender. There may be instances where you’re required to provide financial documents that prove why a deposit was made, a withdrawal occurred, and so on.
In many cases, lenders will be understanding. Even if you’re disqualified from a loan this time, you can always reapply once things have settled down on your end.
The verbal verification of employment process is generally straightforward and requires little effort on your part as the applicant. Make sure your accounts are in order, avoid any sudden job changes, and don’t take it personally if a lender reaches out to you with any concerns. They’re simply doing their job and ensuring you’re a solid applicant.
Before you know it, the VOE process will be over, and you can be settling into your new house or using your loan to better your life in some way.